GENERAL COMMENTS:
Breaking into Monday trade, livestock futures are going to have to work for their positions this week as the market has already clearly indicated that pressure looms -- especially in the cattle sector. With corn rallying a stout $0.25 in the May and July contracts and packers continuing to buy nearly 50% of their cash cattle purchases with delayed delivery, this week will face some stark challenges. July corn is up 25 cents per bushel and July soybean meal is up $7.50. The Dow Jones Industrial Average is up 19.51 points and NASDAQ is up 80.19 points.
LIVE CATTLE:
Live cattle futures are higher, but the day's strength comes with plenty of red flags attached. Looking at last week's negotiated cash cattle trade (see below) this week's cash cattle market could be challenged again by the sheer number of cattle packers have committed for delayed delivery. Packers, as well as the rest of us, throughout understood that seasonal supplies were going to begin to run thin, which would drive cash cattle prices higher amid exceptional consumer demand. To combat losing some of their profit margin, packers have steadily been buying more and more cattle to fit in the 15- to 30-day delivery timeframe to ease their reliance on the cash cattle market. Slaughter may be running at an aggressive pace and boxed beef prices may still be trending higher, but that doesn't mean packers are going to pay more for cattle. June live cattle are up $0.62 at $116.32, August live cattle are up $1.00 at $117.85 and October live cattle are up $0.77 at $122.82. New showlists appear to be mixed -- higher in Kansas, Nebraska/Colorado; lower in Texas.
Last week's negotiated cash cattle trade totaled only 67,738 head. Of that 52% (35,291 head) are committed for delivery in the next two weeks, while the remaining 48% (32,447 head) are scheduled for delivery in the following days.
Boxed beef prices are mixed: choice down $0.77 ($283.00) and select up $1.82 ($273.95) with a movement of 42 loads (24.61 loads of choice, 5.07 loads of select, 6.88 loads of trim and 5.53 loads of ground beef).
FEEDER CATTLE:
Welcome to another Monday where not much is new with nearby corn prices being limit high (May and July contracts). Consequently, feeder cattle futures are crashing lower. April feeders are down $0.87 at $132.97, May feeders are down $0.47 at $137.20 and August feeders are up $0.20 at $150.10. As the feeder cattle contracts absorb the week's sharply higher gains in the corn market, feeders are hopeful the corn market's high is found sooner rather than later as cost of gains are becoming outlandish. Receipts are expected to be light this week throughout sale barns as cattlemen look at the board and its steady decline and want to market their cattle at a more opportune time.
LEAN HOGS:
Lean hog futures are once again soaking up a fruitful Monday as the market supports higher trade. There was some concern that, with Friday's weaker pork cutout and the lack of participation in Friday's cash hog market, this week could be slightly lower. But with packers unable to run double shifts on Saturday, their need to dive wildly into the market is minimal. Monday's technical support and thriving fundamental demand is shining through the market again and advocating for steady to higher prices. June lean hogs are up $0.60 at $106.32, July lean hogs are up $0.95 at $105.47 and August lean hogs are $1.15 at $102.30.
The projected CME Lean Hog Index for 4/23/2021 is up $0.66 at $107.17, and the actual index for 4/22/2021 is up $0.52 at $106.51. Hog prices are higher on the National Direct Morning Hog Report, up $1.14 with a weighted average of $106.66, ranging from $104.00 to $115.00 on 3,692 head and a five-day rolling average of $105.35. Pork cutouts total 133.46 loads with 118.20 loads of pork cuts and 15.26 loads of trim. Pork cutout values: down $0.84, $111.10.
No comments:
Post a Comment